The harvest is largely over in the south, but in the Northwest of the country has been particularly slow.
|RAW MATERIAL||SEPT||AUG CHANGE||PRICES FOR SAME MONTH LAST YEAR||CURRENT PRICE FOR OCTOBER|
|Wheat (ex farm)*||£166.00||(£1.00)||£123.00||£166.00|
The recent rains have disappointed arable farmers hoping to sell milling wheat for flour, as some of it will be downgraded to feed wheat. That means that there should be more feed wheat from the small 2020 harvest, but less milling wheat, to the point where UK flour millers are beginning to import milling quality wheat from Germany. UK prices have lifted sharply over the last week whilst the quantity and quality of the crop has been resolved, but have lifted to the point of making imported wheat and maize competitive again, and to make barley even more cost effective to use. All the focus is on the nearby months of September and October, and maybe once the panic has died down, prices will retreat.
There are large crops from Russia, Canada and Australia are helping to keep prices in check. Russia have again revised their crop upwards to 82.8 MlnT, an increase of 1.6 MlnT. UK nearby months continue to push higher as had been expected on tightness of short term supply.
The US is likely to have the biggest maize crop in US history, which should help keep world prices on the defensive.
UK new crop wheat appears to have lower protein, which will mean that protein will need to be balanced in the diet, increasing the cost of the feed.
Soya prices have lifted in $ terms, and despite the stronger currency are up from a month ago. In $ terms, soya continued its post USDA report rally, which followed the Iowa storm damage, but has begun to retrace slowly. Plantings in the US were record breaking this year and even with the crop downgraded this week from 74% to 73% good/excellent, that is still well ahead of the 53% average for this time of the year, and in a year where pod counts (crop development) are above their 3 year average. This will all help to keep prices in check, however it does feel like we have now moved away from earlier contract lows.
There has been more heavy buying from China.
Looking at the sunflower crop, the tonnage in Ukraine and Russia is large, the crop looks healthy and harvesting should start in the next fortnight. This will then begin to filter through to UK new crop prices as the crush margins for sunflower are healthy, so crushers will want to be selling the meal, particularly as nearby prices are at a premium.
Oil prices have been lifting over the last couple of months, tracking the rising brent crude prices – it is illogical in one sense, but the vegetable oil has followed the price of mineral oil for a number of years.